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EcommerceBytes-NewsFlash, Number 2950 - December 05, 2012 - ISSN 1539-5065    2 of 4

Amazon Hikes FBA Fees

By Ina Steiner
December 05, 2012

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For most sellers, it's about to get more expensive to use Amazon's fulfillment service. Amazon is increasing the fees for the majority of products it fulfills on behalf of third-party sellers, and it's introducing a brand new fee for returns in certain categories.

Amazon.com notified third-party sellers on Tuesday of the fee increase coming in February, blaming it on the increasing cost of transportation. The online marketplace will also introduce a new "Returns Processing Fee" for customer-returned products in categories for which Amazon offers free return shipping.

Amazon is increasing the Weight Handling Fee, which will vary by product size tier, to better reflect transportation costs. At the same time, Amazon is introducing new product size tiers, resulting in six total: Small Standard-Size, Large Standard-Size, Small Oversize, Medium Oversize, Large Oversize, and Special Oversize.

There will also be some fee reductions, including many products that fit into the new "Small Oversize" and "Medium Oversize" categories. In addition, a change in the Pick & Pack Fee will result in a fee reduction for most Oversize products; and for large-screen televisions, Amazon is reducing the special handling fee.

Amazon said it was not changing fees for Multi-Channel Fulfillment fees, Zero-Fee Fulfillment, Inventory Storage Fees, or any optional service fees.

In its announcement about the new fees, Amazon provided sellers with a laundry list of improvements it has made over the past year, and cited Amazon Lockers and same-day shipping in select cities as product innovations, both of which have been getting a lot of mention in the press lately:

"In the past year, we have made it easier for customers to order and receive your products, including innovations such as Amazon Lockers and same-day shipping in select cities; and we have continued to grow the benefits and membership of Amazon Prime, which this year has surpassed FREE Super Saver Shipping in items shipped. We have also enhanced the FBA and Seller Central experience, through better access to your important business data on the Sales Dashboard and Payments reports; value-added services such as the FBA Label Service; and new ways to reach global customers with FBA Global Export."

The new Returns Processing Fee will apply to customer-returned products sold on Amazon.com in categories for which Amazon offers free return shipping, including the following categories: Apparel (including Sports Apparel); Watches; Jewelry; Shoes; and Luggage.

Amazon said offering free returns to customers in those categories helped to build customer trust and encourage purchase. "To better reflect our costs, when customers receive free return shipping on products in these categories, the seller will be charged a fee for each unit returned. This fee will be equivalent to the fulfillment fees for an individually shipped unit."

However, it said, in cases where Amazon takes responsibility for the loss or damage of a returned product (for example, lost or broken in transit), the fee will not be assessed.

Amazon's new FBA fees take effect on February 18, 2013. It will update the FBA Revenue Calculator in the coming days so sellers can view and compare estimated fulfillment costs under the current fee structure and the new fee structure.

Comment on the AuctionBytes Blog.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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